Healthcare Fraud

A settlement has been reached in a whistleblower class action lawsuit brought against Alpharma Inc who is accused of paing health care providers to induce them to promote or prescribe their drug, Kadian.

According to the settllement, the United States will receive $33.6 million to resolve the federal claims and the states will receive approximately $8.9 million to settle their respective claims. The whistleblower will receive $5.33 million out of the federal share of the recovery.

The original case was filed in September of 2006.  The United States alleged that, between January 1, 2000 and December 29, 2008, Alpharma paid health care providers to induce them to promote or prescribe Kadian, and made misrepresentations about the safety and efficacy of the drug, which is used to treat chronic moderate to severe pain. A

A settlement has been reached in a whistleblower class action lawsuit brought against McAllen Hospitals LP, d/b/a/ South Texas Health System, who is accused of paying illegal compensation to doctors in order to induce them to refer patients to hospitals within the group.

According to settlement details, the federal government will receive $25,208,333 and the state of Texas will receive $2,291,667 for claims submitted to the state Medicaid program. The whistleblower will receive $5.5 million from the proceeds of the settlement.

Originally filed in 2005, the federal government alleged that the defendants had entered into financial relationships with several doctors in McAllen in order to induce them to refer patients to the defendants’ hospitals. The government alleged that these payments were disguised through a series of sham contracts, including medical directorships and lease agreements. Under the Stark Statute, Medicare providers are prohibited from billing Medicare for referrals from doctors with whom the providers have a financial relationship, unless that relationship falls within certain exceptions.

A settlement has been reached in a whistleblower class action lawsuit brought against St. Jude Medical Inc of St. Paul, MN who is accused of paying kickbacks to induce physicians to implant the company’s pacemakers and defibrillators.

The whistleblower will recover a $2.64 million share of the government's settlement.

Originally filed in July 2006, the United States allged that St. Jude used three post-market studies and a device registry as vehicles to pay participating physicians kickbacks to induce them to implant St. Jude pacemakers and defibrillators. Although St. Jude collected data and information from participating physicians, it is alleged that the company knowingly and intentionally used the studies and registry as a means of increasing its device sales by paying certain physicians to select St. Jude pacemakers and implantable cardioverter defibrillator for their patients. In each case, St. Jude paid each participating physician a fee that ranged up to $2,000 per patient. The United States alleged that St. Jude solicited physicians for the studies in order to retain their business and/or convert their business from a competitor’s product.

A settlement has been reached in a whistleblower class action lawsuit brought against Cardinal Health Inc who is accused of making payments to induce referral orders for its prescription drugs.

The whistleblowers will share in a $760,000 settlement recovery.

The whistleblower initially filed the case November 2008.  He brought to light that Cardinal paid him $440,000 in exchange for an agreement that he purchase from Cardinal prescription drugs for his pharmacies.

A settlement has been reached in a whistleblower class action lawsuit brought against Guidant LLC, a wholly owned subsidiary of Boston Scientific Corp.  Guidlant is accused of inflating the cost of replacement pacemakers and defibrillators to federal health care programs.

The whistleblower will receive a $2.3 million share of the government's recovery.

Originally filed in September 2003, the United States alleged that Guidant inflated the cost of replacement pacemakers and defibrillators to federal health care programs by knowingly failing to grant warranty credits and rebates to hospitals for pacemakers and defibrillators that were explanted while covered under a product warranty or another credit program. The government also alleged that Guidant actively promoted the longevity and reliability of its pacemakers and defibrillators to physicians in an effort to convince them to purchase Guidant products over competing devices. Guidant reinforced these claims by touting the generous credits available should a device need to be replaced while covered under warranty. At the same time, Guidant allegedly was fully aware that it failed to grant an appropriate credit to the purchaser of the device in a large number of cases where a product failed while still under warranty. As a result, the United States contends that Guidant submitted invoices to Department of Veterans Affairs hospitals and Department of Defense facilities that overstated the cost for a replacement pacemaker or defibrillator. In addition, Guidant’s alleged submission of inflated invoices for pacemakers and defibrillators to private hospitals caused these hospitals to overstate the cost of these devices on hospital cost reports, resulting in Medicare paying more for pacemakers and defibrillators than it otherwise should have.

A settlement has been reached in a whistleblower class action lawsuit brought against DFine Inc who is accused of paying kickbacks to induce physicians to use certain of the company’s devices that are used in treating spinal fractures.

The whistleblower will receive approximately $250,000 of the government's recovery.

Originally filed in July 2010, the United States alleged that DFine used customer surveys known as User Preference Evaluations (UPE) as vehicles to pay participating physicians illegal kickbacks to induce them to use the company’s vertebral augmentation devices. Although DFine ostensibly collected product information from participating physicians, each UPE survey required use of a new DFine device in a patient, the majority of whom were Medicare beneficiaries. In each case, DFine paid physicians up to $500 per patient to participate in the survey. The government alleges that DFine provided improper remuneration in the form of travel expenses, lavish dinners, entertainment and promotional speaker fees to doctors located in Chicago and Little Rock, Ark. The United States further alleges that DFine solicited physicians to convert their business from a competitor’s product and/or persuade the physicians to continue using DFine products.

According to the United States, DFine’s alleged conduct violated the Anti-Kickback Statute. Among other things, that law prohibits offering or paying remuneration to induce referrals of items or services covered by Medicare, Medicaid or other federally-funded programs.If you or someone you know experienced a similar situation or any other wrongdoing within a corporation you should contact mail@whistleonfraud.com

A settlement has been reached to resolve False Claims Act allegations against acific Health Corporation (PHC) and related entities.  They are accused of engaging in an illegal kickback scheme in Los Angeles.

The settlement resolves a US and state investigation of three PHC-affiliated hospitals for engaging in a scheme in which the hospitals paid recruiters to deliver homeless Medicare or Medi-Cal beneficiaries (homeless beneficiaries) by ambulance from the “Skid Row” area in Los Angeles to the hospitals for treatment that often was medically unnecessary. 

The hospitals, Los Angeles Metropolitan Medical Center (LA Metro); Newport Specialty Hospital, formerly known as Tustin Hospital and Medical Center; and Anaheim General Hospital, then allegedly billed Medicare and Medi-Cal for these services, violating rules that permit payment only for necessary treatment. The governments contended that these services were induced by illegal remuneration in violation of the Anti-Kickback statute (AKS), and the resulting billings to Medicare and Medi-Cal violated the False Claims Act.

A settlement has been reached in a whistleblower class action lawsuit brought against Blackstone Medical Inc, a subsidiary of Orthofix International NV, who is accused of paying illegal kickbacks to physicians in order to induce use of the company’s products.

The whistleblower will receive an $8 million share of the government's recovery.

The initial whistleblower lawsuit was filed September 2006.  The government's complaint alleged that Blackstone paid kickbacks to spinal surgeons. These alleged kickbacks took a number of forms, including sham consulting agreements, sham royalty arrangements, sham research grants, travel and entertainment.

A settlement has been reached in a whistleblower class action lawsuit brought against Steven J. Wasserman, MD, a dermatologist practicing in Venice, FL.  He is accused of accepting illegal kickbacks from a pathology laboratory and by billing the Medicare program for medically unnecessary services.

The whistleblower will receive $4,046,000 of the settlement.

The federal government's complaint stemmed from an initial whistleblower case that was filed in April 2004.  The United States alleged that in or around 1997, Dr. Wasserman entered into an illegal kickback arrangement with Tampa Pathology Laboratory (TPL), a clinical laboratory in Tampa, Fla., and Dr. José SuarezHoyos, a pathologist and the owner of TPL, in an effort to increase the lab’s referral business. Under that agreement, Dr. Wasserman allegedly sent biopsy specimens for Medicare beneficiaries to TPL for testing and diagnosis. In return, TPL allegedly provided Dr. Wasserman a diagnosis on a pathology report that included a signature line for Dr. Wasserman to make it appear to Medicare that he had performed the diagnostic work that TPL had performed. The government alleged that Dr. Wasserman then billed the Medicare program for TPL’s work, passing it off as his own, for which he received more than $6 million in Medicare payments. In addition, the government asserted that, in furtherance of his agreement with TPL, Dr. Wasserman substantially increased the number of skin biopsies he performed on Medicare patients, thus increasing the referral business for TPL.

The government further alleged that, in addition to his involvement in the alleged kickback scheme, Dr. Wasserman also performed thousands of unnecessary skin surgeries known as adjacent tissue transfers on Medicare beneficiaries. Adjacent tissue transfers are complicated and often time-consuming procedures physicians sometimes use to close a defect resulting from the removal of a growth on a patient’s skin. The government alleged that Dr. Wasserman performed many of these procedures in order to obtain the reimbursement for them, and not because they were medically necessary.

A settlement has been reached to resolve False Claims Act allegations against Intermountain Health Care Inc who is accused of engaging in improper financial relationships with referring physicians.

These allegations were brought by the Justice Department’s Civil Division, the United States Attorney’s Office for the District of Utah, the Office of Inspector General of the Department of Health and Human Services and the Centers for Medicare and Medicaid Services.

The $25,500,000 settlement resolves claims that Intermountain Health Care Inc allowed for employment agreements under which the physicians received bonuses that improperly took into account the value of some of their patient referrals; and office leases and compensation arrangements between Intermountain and referring physicians that violated other requirements of the Stark Statute. These issues were disclosed to the government by Intermountain.

The claims settled by this agreement are allegations only.